A Structural Equations Model of Qualitative Elements Influencing Automobile Insurance Uptake

Around the world, automobile insurance (Comprehensive Coverage Policy) offers a greater coverage to vehicles and contributes significantly to insurance company’s revenue as one of the popular policy choices of vehicle owners. However, the case is somewhat different in Bangladesh as such policy, on an average, adds comparatively less to the overall revenue of any typical insurance company. Besides financial terms, behavioral attributes and other qualitative aspects have wide-ranging influence on insurance decisions. This study explores potential antecedents of insurance uptake, including driving attributes, perception of accident risk, vehicle specifications, and neighborhood effects. The mediation effects of road safety awareness and insurance literacy on insurance uptake were also examined. Self-reported questionnaire was used to collect data through survey responses from 332 vehicle owners. The study findings suggest that road safety awareness and insurance literacy mediate some effects on automobile insurance uptake.